2-Year Japan Govt Note Auction Produces Positive Yield


Tokyo, Dec. 27 (Jiji Press)--An auction of new two-year Japanese government notes Tuesday produced a maximum accepted yield of 0.055 pct, the first positive yield in some seven years for two-year note auctions.

The Finance Ministry is expected to raise the coupon rate on 10-year Japanese government bonds at its next auction on Jan. 5.

Both moves reflect the Bank of Japan's decision last week to raise its cap on the benchmark 10-year JGB yield. Higher yields and coupons bear a heavier burden on the country's finances due to larger interest payments.

The central bank's decision on Dec. 20 was viewed as a de facto interest rate increase, sending JGB yields shooting up. The benchmark 10-year yield briefly rose to 0.48 pct on Wednesday, the highest level in more than seven years.

The coupon rate on the next 10-year JGB issue to be auctioned on Jan. 5 is set to be decided by the ministry based on market trends that morning.

[Copyright The Jiji Press, Ltd.]

Jiji Press